By Erika Mendez – Student Journalist
Cryptocurrency is digital money that is stored on a secure computer file, and can be used to buy goods and services, or as popularized with investing. Bitcoin is just one type of crypto to emerge in the last few years.
Bitcoin is a decentralized payment network that is solely powered by its users with no need for a middleman. In other words, the virtual currency is not tied to any nation, corporation or bank. It was created in 2009 by an unknown group or person using the alias Satoshi Nakamoto. Today, a single Bitcoin is worth $30,737 USD.
You see, when we are dealing with any type of credit/debit cards, our funds are moving through bank accounts. Through the banking institutions, there are fees customers are responsible for and regulations to abide by. However, cryptocurrencies are still regulated by the IRS so they treat it as taxable income.
Bitcoins are stored in a digital wallet that have a unique secure key. Unlike bank accounts, bitcoin wallets are not insured by the Federal Deposit Insurance Corporation (FDIC). Bitcoin Exchanges are marketplaces that allow people to buy or sell bitcoins using different currencies. Coinbase is the leading exchange followed by Bitstamp. Security can be a concern when dealing with these digital platforms because it can be hacked or viruses can destroy them.
There is certainly a degree of anonymity with Bitcoin. Each transaction is recorded on a public database that is identified by a wallet ID – the names of buyers or sellers are never revealed. The transactions of bitcoin users remain private and it allows them to buy or sell without being easily traced.
The future of Bitcoin remains unknown. It continues to grow in value due to the scarcity of it which makes for a good investment but there are still risks that come with it as mentioned. It’s possible for Bitcoin to become a global currency and the possibilities for global economic growth and equality would be countless.